The business and financial priorities of a company rarely change. The list practically writes itself: Grow revenue, increase efficiency, optimize costs, and find new ways to add value while mitigating risk. However, sometimes we see changes in the strategies for achieving those goals, depending on macroeconomic factors and internal business strengths or challenges.
According to a recent survey from McKinsey, CFOs have identified inflation as the top threat to growth but they aren’t taking this challenge lying down. Instead, they’re taking proactive steps to mitigate risks associated with disproportionate price hikes from suppliers and falling demand while also maintaining a positive outlook for the future. In this environment, areas of focus include operational value drivers, key performance indicators, cash management, and capital structure. These CFOs are also working to increase their participation in business decision-making, analyzing cash flow more frequently, and devoting more time to M&A activities.
That’s a pretty overwhelming workload, but automation and artificial intelligence are taking the lead as a means for addressing it. McKinsey took the time to examine this and states that no business can take full advantage of the opportunities presented by these technologies without fundamentally rethinking their processes and organizations. It simply will not cut it to try and retrofit automation tools into already existing processes. Instead, financial leaders will need to redesign their activities and organizational structures around a portfolio of technologies.
This isn’t about investing in every technology in existence. It is about making sure that you’re investing in the right capabilities that support your overall strategy. That’s where trusted technology advisors come into play. You need a partner that will have your best interests at heart and approach your strategy from a collaborative standpoint where they say, ‘We know the technology and you know your business, so let’s work together to come up with the roadmap that makes sense.’ If you don’t have a partner who can and will do that, even in the face of making a smaller sale, then you’ve got the wrong partner. On the other hand, you do have to be open to innovation and investing in a strategy that means not buying too small compared to what’s needed to meet your objectives. It’s a balance.
The following is an overview of five focus areas for growth and their significance. For a deeper dive and a look at specific value levers, you can download the white paper below.
P: People
Create truly dynamic, engaging, and employee-centered experiences to attract and retain talent. Close the capability chasm by integrating your people, processes, and technology.
Two important goals that can have long-term effects are automation and something you might call augmented intelligence. If you automate the more mundane tasks of any given role, people can focus on more rewarding goals that also translate into more engagement and profitability. Augmented intelligence means sharing data and resources across work groups so that any given person has the information they need when they need it. With those two things in place, people have the tools to make a difference. Everybody wins.
Why It’s Important
The business advantage of talent management goes well beyond happy employees who continue to be engaged. The competitive advantage has everything to do with building and maintaining brand reputation, which often translates into more revenue because it is enterprise-wide, not function-specific.
This is where cloud technologies come in. Optimizing interactions across your organization and at customer touchpoints with real-time, access to data can enhance communication, boost efficiency, and promote innovation. It also helps increase employee retention by automating workflows and allowing people to focus on adding value.
R: Revenue
Drive revenue, profit, and volume. Expand sales channels and improve customer engagement.
You can leverage technology to help you find customers, extend your business model, and compete with major industry players. When you ask yourself whether you’re growing revenue at or above the average for your industry, your answer should bring clarity. If yes, it’s important to know why. If not, it’s important to ask why you’re being left behind. How your customers find you and experience the sales cycle can become a competitive advantage, rather than a headwind, with the right balance of people and technology.
Why It’s Important
Revenue growth starts with data so that you can learn where and when to pivot to beat larger competitors and market disruptors. Industry winners during past economic slowdowns are the businesses that innovated their business models and processes faster than competitors.
I: Innovation
Create business value with new technologies (RPA, machine learning, AI, advanced analytics).
Innovation, like many things in business, is not something you can look at from a singular viewpoint. It is internal and external, it is technology, it is people, it is process, it is every facet of your business experience. Innovation is a craft that is developed, learned, and improved over time throughout your entire organization. This is why data and the ability to leverage it is so important. If you truly understand who your customers are—their strengths and weaknesses, their challenges and goals—then you can see where your offerings will help them and where you need to improve to better serve your customers.
Why It’s Important
Revenue growth always requires a multi-pronged approach. You need to drive top-line growth with new business models that generate new sources of revenue and bottom-line growth by automating common, repetitive tasks with proven business processes for your industry. Automation gives you more time to focus on both value creation and risk mitigation, thus ensuring your innovation efforts continue to serve your business over time.
C: Cost
Reduce business waste, optimize inputs, improve enterprise planning, and automate processes.
Whether you’re looking at gross margin or net margin, you can contain costs by using technology to scale your business — often more efficiently than what is possible by adding more people. It’s about making the most of the team you already have and only scaling back if your level of efficiency warrants it. For example, you could decrease your sales team from 20 to 2, but that may not help you as much as implementing automation tools that give your team more time to work the leads in their pipeline. It still comes back to efficiency in most cases.
Why It’s Important
Change is not new in the business world. However, we’ve seen more significant change in recent years. Technology has accelerated the pace of business and fundamentally disrupted what we once thought were well-established business models and processes.
To keep pace, more and more businesses have turned to intelligent technology solutions to automate and run their business operations. While the reasons vary, many have sought to address intensified cost pressures, boost efficiency, and closely monitor KPIs as markets shift and create new opportunities or risks.
E: Experience
Personalize and simplify the user experience for employees and customers, on any device.
While it can be easy to focus solely on the customer, your employees are the path to creating customer loyalty as well as innovation and overall growth. Thus, the technology assets you invest in have two jobs. The first is to attract and retain talent, and the second is to provide tools to help your people foster deeper relationships with your customers. The more your employees’ purpose delivers value that they can see firsthand, the more motivation and excitement they will have. And their experience will translate into improving customer experience and brand reputation. It’s all connected.
Why It’s Important
Personalization and serving your purpose start with simplifying the user experience for employees and customers, on any device. This means having one connected system to deliver one source of truth, not trying to stitch together multiple systems that create the risk of missed opportunities and repeating past problems.
That one connected system helps you make better-informed decisions by seeing data in context with your entire business so that you can manage everything from your SG&A costs to supply chains to customer relationships.
For a Deeper Dive
The following white paper examines 5 focus areas for growth and their associated value levers in more detail. These focus areas are designed to help you become more resilient, even when faced with challenges like inflation or changing customer buying preferences.
